Entrepreneurs for Impact (EFI) Podcast: Transcripts
#77:
It’s Getting Hot in Here – 2X Valuation for the SOSV Climate Tech 100
Chris Wedding:
Hey there, it's your host Chris Wedding. With this episode, we are trying another solo version where I talk through a few highlights from the Entrepreneurs for Impact newsletter with maybe an announcement or two.
First, let's look at the newsletter from May 19th. I've got three things I'm going to call out here. The first is called 2X Valuation Increase the SOSV Climate Tech 100 list. All right, as I say, “This is the kind of year over year growth that'll make you want to hug a coworker.” I mean, like tightly, but not too tightly and there's more. “The total investment in this portfolio also increased 2X since last year. That means the aggregate valuation and capital raised are at 11 billion and 3.8 billion respectively and that of course is respectable indeed.” So, who is investing alongside SOSV in these deals?
Well, they count 255 investors that have co-invested at least a million dollars in these top 100 companies. That number of co-investors is up 53% since the year before, so pretty exciting to help us feel a little optimistic about the capital going towards climate solutions.
They go on, “The top 10 investors represented 51% of the funds invested and some of those top 10 investors include the Abu Dhabi Growth Fund,” Canada, easy for me to say, “Canada Pension Plan Investment Board, Future Positive, Hanwha International, Horizons Ventures, Kaszek Ventures, SK Group, SoftBank, Temasek, and Tiger Global.”
They then go on to say that there are 139 investors that have backed two or more startups. In the top 116, investors have funded four or more of these top 100 SOSV startups. I'm going to read out a few of the ones in that ladder list, funding four or more startups.
These are Blue Horizon, CPT Capital, Fifty Years, Hemisphere Ventures, again, Horizons Ventures, Alumni Ventures, Draper Associates, Marinya Capital, Hanwha International, Humboldt Fund, Asymmetry Ventures, and the US government's SBIR and STTR programs.
In the newsletter, of course, I've got a link to the full list of these 100 companies. Obviously, you can find those on the SOSV site as well. What you'll get is an Airtable that shows which SOSV program, company description, stage, funding, et cetera. So, super interesting resource and don't we all just wish we were SOSV about five years ago or so to start investing in companies, embedded companies, coach companies at this stage?
All right, second story from our newsletter is called, new report, how to finance a first-of-a-kind, FOAK, F-O-A-K project. So, I go on, “Let's say you're a VC-backed climate tech company with 50 million bucks raised to improve and validate your secret sauce. Awesome, hooray. Oh wait, you're not done yet. Now it's time to scale to build a large project using your tech.” And that's where lots of questions come with insufficient answers. So, for example, how will you get equity funding and will you need to donate a kidney in order to get it? Ha-ha-ha.
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Second question, is debt funding possible, any debt possible on these projects, which are perceived to have much higher risks. And if so, will the borrowers need to also occupy a room in your home where they will sit ominously in the dark with a baseball bat in one hand? Again, another bad joke.
The third, will contractors, will EPC firms, engineering, procurement, construction firms, will they take on the technical and reputational risk in exchange for, obviously the upside of a license to build said facility for a certain period of time, for a certain number of customers, for a certain geography, et cetera?
This report of which I speak is called Barriers to the Timely Deployment of Climate Infrastructure. Supporters include Prime Coalition, Schmidt Futures, and Blue Haven Initiative. Advisors include Richard Kauffman, Mark Barnett, Sarah Kearney, Matthew Nordan, Johanna Wolfson, and Lou Schick. And the author, whose name I will not say correctly, I'll go and apologize now, Karine Khatcherian, I hope that's somewhat close. Somebody can correct me, I'm sure.
It builds off of interviews with 140 plus senior members in the climate ecosystem. Wait a second, I didn't get a phone call. Anyway, great research and I have been spreading this intel far and wide. Hope you can as well.
The third topic says, “Are you an unconscious leader?” I go on, “Who, me? Of course not me. You must be speaking about someone else, but let's just check to be sure.” That is where this new book, it's not new, but a new book in my library, I suppose, comes in handy. It's called The 15 Commitments of Conscious Leadership: A New Paradigm for Sustainable Success.
So, this is pertinent since at our recent in-person peer group retreat for the Climate CEO Mastermind that I lead, we held it at Duke University where I teach. It was amazing, if I do say so myself, but one of the small gifts, aka assigned readings on all of these CEOs playing rides home, was this book in particular.
What I do here in the newsletter is I pick out two of the 15 commitments of conscious leadership as well as the website, conscious.is/15-commitments, where you get a flavor for what's in the book. Now I'm going to read these two sections. The first commitment is on responsibility. The second commitment is on curiosity and what you'll see is that there is a by me section and a for me section and you just be the judge on which one that you would prefer to be.
So, under responsibility, the by me says, “I commit to taking full responsibility for the circumstances of my life and my physical, emotional, mental, and spiritual well-being. I also commit to support others to take full responsibility for their lives.” All right, that's part one. The second part, the to me, T-O, to me section reads, “I commit to blaming others and myself for what is wrong in the world. I commit to being a victim, villain, or hero, and taking more or less than 100% responsibility.” Pretty sure you're clear which of those two scenarios defines a conscious leader.
The second under curiosity, the by me part says, “I commit to growing in self-awareness. I commit to regarding every interaction as an opportunity to learn. I commit to curiosity as a path to rapid learning.” The To Me section says, “I commit to being right and to seeing the situation as something that is happening to me. I commit to being defensive, especially when I'm certain that I'm right.” I'm sure we've never felt that way. Anyway, two out of 15, I'm sure you'll find much more goodness there at the link. So, that's the bulk of the newsletter. You can find us at entrepreneursforimpact.substack.com.
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The short announcement is that from June 1st to 14th, I'm going to offer a live cohort-based course through maven.com. You'll have 24 other entrepreneurs to provide peer-to-peer feedback. It's on funding your climate tech startup. So, I'll give you access to 500 climate investors' details, emails, LinkedIn, a five-step process for raising capital, four tools for assessing your competitive edge, a nine-step method for improving your business plan and the top 10 startup funding mistakes to avoid.
The deadline to enroll is I think May 28th on Sunday. Hope to see you there and if you wanted to chat for a few minutes about the course to make sure it's a fit, you can probably find the LinkedIn post or Twitter from me with a short Zoom invite for a chat. Anyway, that's all for now. Keep on fighting the good fight. Peace.